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Exhibit 10.3
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
This Amended and Restated Executive Employment Agreement ("Agreement")
is dated as of October 28, 1996, between Procom Technology, Inc., a California
corporation (the "Company"), and Xxxx Xxxx'joo (the "Executive").
WITNESSETH:
WHEREAS, the Company believes that the Executive is a valued employee
of the Company and wishes to ensure his continued employment with the Company
and document the terms of the Executive's employment by the Company.
WHEREAS, the Company also has determined that it is in the best
interests of the Company and its shareholders to reinforce and encourage the
continued attention and dedication of certain key members of the Company's
management, including the Executive, to their assigned duties without
distraction in uncertain circumstances arising from the possibility of a change
in control of the Company.
WHEREAS, the Company also has determined that it is in the best
interests of the Company and its shareholders to minimize the personal
considerations of certain key members of management in their evaluation of any
potential change in control of the Company.
WHEREAS, the Company has determined that the loss of the Executive's
services would have a detrimental effect on the implementation of a change in
control of the Company (in the event the Company determines to effect such a
change in control of the Company).
NOW, THEREFORE, taking into account the foregoing and in consideration
of the mutual promises and conditions contained herein, the parties hereto agree
as follows:
ARTICLE I
EMPLOYMENT
1.1 Employment. The Company employs the Executive and the Executive
hereby accepts employment as the President and Chairman of the Board of the
Company upon the terms and conditions hereinafter set forth.
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1.2 Term. The employment of the Executive by the Company under the
terms and conditions of this Agreement will commence on the date hereof and
continue for a period of three (3) years ("Employment Term"). Commencing on the
first anniversary of the date hereof, the Employment Term shall be extended on a
daily basis such that the remaining term shall at all times be three (3) full
years.
1.3 Executive Duties. As the Company's President and Chairman of the
Board, the Executive shall perform such duties as are requested by and shall
report directly to the Company's Board of Directors. The Executive agrees to
devote his full business time (with allowances for vacations and sick leave) and
attention and best efforts to the affairs of the Company and its subsidiaries
and affiliates during the Employment Term.
ARTICLE II
COMPENSATION AND BENEFITS
2.1 Annual Salary. During the Employment Term, the Company shall pay to
the Executive a base salary at the initial rate of not less than Two Hundred
Twenty-Five Thousand ($225,000) per year, payable in substantially equal
semimonthly installments. The Company will review annually and may, in the
discretion of the Board of Directors, increase such base salary in light of the
Executive's performance, inflation in cost of living or other factors. The
Company also shall pay to the Executive an annual incentive compensation bonus
to be calculated and paid as set forth on Exhibit A. For purposes of this
Agreement, the Executive's annual base salary and annual incentive compensation
bonus collectively shall be referred to herein as his "Annual Salary."
2.2 Benefits. During the Employment Term, the Executive shall be
eligible for participation in and covered by any and all such performance,
bonus, profit sharing, incentive, stock option, and other compensation plans and
such medical, dental, disability, life, and other insurance plans and such other
benefits generally available to other employees of the Company in similar
employment positions, on the same terms as such employees, subject to meeting
applicable eligibility requirements (collectively referred to herein as the
"Company Benefit Plans").
2.2.1 The Company shall maintain for the Executive during the term
of this Agreement a life insurance policy of not less than One Million Dollars
($1,000,000). In addition, the Company shall provide to the Executive a One
Thousand Dollar ($1,000) annual tax preparation allowance.
2.3 Reimbursement of Expenses. The Executive shall be entitled to
receive prompt reimbursement of all reasonable expenses incurred by the
Executive in performing services hereunder, including all expenses of travel,
entertainment and
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living expenses while away from home on business at the request of, or in the
service of, the Company, provided that such expenses are incurred and accounted
for in accordance with the policies and procedures established by the Company.
2.4 Automobile Allowance. The Company shall provide the Executive with
an automobile allowance in the amount of Seven Hundred Fifty Dollars ($750) per
month as reimbursement to the Executive of costs and expenses incurred by the
Executive for the purchase or lease and maintenance and operation of an
automobile for use by the Executive in the performance of the Executive's duties
hereunder. Such automobile allowance shall be paid in substantially equal
semi-monthly installments.
2.5 Vacation and Holidays. The Executive shall be entitled to an annual
vacation leave of four (4) weeks at full pay or such greater vacation benefits
as may be provided for by the Company's vacation policies applicable to senior
executives of the Company. Any unused vacation time may be accumulated and
carried over from one year to the next; provided, however, if any vacation time
would otherwise be carried over for a second year, the Executive may, at his
option, elect not to have such vacation time carried over but may instead
request the Company to compensate the Executive for such vacation time by paying
the Executive for such time at the Executive's then current base salary rate.
Except to the extent that accumulated vacation time is paid off by the Company
as described above, none of the accumulated vacation time will be lost for any
reason. Executive shall be entitled to such holidays as are established by the
Company for all employees.
ARTICLE III
CONFIDENTIALITY AND NONDISCLOSURE
3.1 Confidentiality. Executive will not during Executive's employment
by the Company or thereafter at any time disclose, directly or indirectly, to
any person or entity or use for Executive's own benefit any trade secrets or
confidential information relating to the Company's business, operations,
marketing data, business plans, strategies, employees, negotiations and
contracts with other companies, or any other subject matter pertaining to the
business of the Company or any of its clients, customers, consultants, or
licensees, known, learned, or acquired by Executive during the period of
Executive's employment by the Company (collectively "Confidential Information"),
except as may be necessary in the ordinary course of performing Executive's
particular duties as an employee of the Company.
3.2 Return of Confidential Material. Executive shall promptly deliver
to the Company on termination of Executive's employment with the Company,
whether or not for Cause and whatever the reason, or at any time the Company may
so request,
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all memoranda, notes, records, reports, manuals, drawings, blueprints,
Confidential Information and any other documents of a confidential nature
belonging to the Company, including all copies of such materials which Executive
may then possess or have under Executive's control. Upon termination of
Executive's employment by the Company, Executive shall not take any document,
data, or other material of any nature containing or pertaining to the
proprietary information of the Company.
3.3 Prohibition on Solicitation of Customers. During the term of
Executive's employment with the Company, and for a period of two (2) years
thereafter, Executive shall not, directly or indirectly, either for Executive or
for any other person or entity, solicit any person or entity to terminate such
person's or entity's contractual and/or business relationship with the Company,
nor shall Executive interfere with or disrupt or attempt to interfere with or
disrupt any such relationship. None of the foregoing shall be deemed a waiver of
any and all rights and remedies the Company may have under applicable law.
3.4 Prohibition on Solicitation of Employees, Agents or Independent
Contractors After Termination. During the term of Executive's employment with
the Company and for a period of two (2) years following the termination of
Executive's employment with the Company, Executive will not solicit any of the
employees, agents, or independent contractors of the Company to leave the employ
of the Company for a competitive company or business. However, Executive may
solicit any employee, agent or independent contractor who voluntarily terminates
his or her employment with the Company after a period of 120 days have elapsed
since the termination date of such employee, agent or independent contractor.
None of the foregoing shall be deemed a waiver of any and all rights and
remedies the Company may have under applicable law.
3.5 Right to Injunctive and Equitable Relief. Executive's obligations
not to disclose or use Confidential Information and to refrain from the
solicitations described in this Article III are of a special and unique
character which gives them a peculiar value. The Company cannot be reasonably or
adequately compensated for damages in an action at law in the event Executive
breaches such obligations. Therefore, Executive expressly agrees that the
Company shall be entitled to injunctive and other equitable relief without bond
or other security in the event of such breach in addition to any other rights or
remedies which the Company may possess or be entitled to pursue. Furthermore,
the obligations of Executive and the rights and remedies of the Company under
this Article III are cumulative and in addition to, and not in lieu of, any
obligations, rights, or remedies created by applicable law relating to
misappropriation or theft of trade secrets or Confidential Information.
3.6 Survival of Obligations. Executive agrees that the terms of this
Article III shall survive the term of this
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Agreement and the termination of Executive's employment by the Company.
ARTICLE IV
TERMINATION
4.1 Definitions. For purposes of this Article IV, the following
definitions shall be applicable to the terms set forth below:
(a) Cause. "Cause" shall mean only the following: (i) the
Executive's death or Disability; (ii) the willful and continued failure by the
Executive to substantially perform his duties hereunder (other than such failure
resulting from the Executive's incapacity due to physical or mental illness)
after demand for substantial performance is delivered by the Company that
specifically identifies the manner in which the Company believes the Executive
has not substantially performed his or her duties; (iii) willful misconduct by
the Executive which is materially injurious to the Company; (iv) conviction of a
felony under the laws of the State of California; (v) habitual drunkenness by
the Executive; or (vi) a willful, material breach of this Agreement by the
Executive. For purposes of this Agreement, no act, or failure to act, on the
Executive's part shall be considered "willful" unless done, or omitted to be
done, by the Executive in bad faith and without a reasonable belief that such
action or omission by the Executive was in the best interests of the Company.
Notwithstanding anything to the contrary in the foregoing, no termination or
other action shall be considered to be for Cause under this Agreement unless (x)
the Executive first shall have received at least 30 days written notice setting
forth the reasons for the Company's intention to terminate or take other action
and shall have been provided an opportunity to appear, accompanied by counsel,
and be heard before the Board of Directors; (y) after such appearance before the
Board, the Board of Directors shall have duly adopted by a majority of the
Directors of the Company then in office, and shall have provided to the
Executive a certified resolution finding that in the good faith opinion of such
Directors the Executive was guilty of conduct constituting Cause, as set forth
above, and specifying the particulars thereof in detail; and (z) the Executive
shall have failed to cure or remedy the event constituting Cause within 30 days
after the Executive's receipt of such certified resolution from the Board of
Directors.
(b) Disability. "Disability" shall mean a physical or mental
incapacity as a result of which the Executive becomes unable to continue the
proper performance of his duties hereunder (reasonable absences because of
sickness for up to three (3) consecutive months excepted). A determination of
Disability shall be subject to the certification of a qualified medical doctor
agreed to by the Company and the Executive or, in the event of the Executive's
incapacity to designate a doctor, the Executive's legal representative. In the
absence of
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agreement between the Company and the Executive, each party shall nominate a
qualified medical doctor and the two doctors so nominated shall select a third
doctor, who shall make the determination as to Disability.
(c) Good Reason. "Good Reason" shall mean each of the following:
(i) the failure of the Company to vest the Executive, without the Executive's
consent, with the powers and authority of the Executive's office or position of
employment as contemplated herein, or any removal of the Executive from or
failure to re-elect the Executive, without the Executive's consent, to a
position of employment consistent with the position and status of Executive as
set forth herein; (ii) a reduction by the Company, without the Executive's
consent, in the Executive's annual base salary as it may exist from time to
time; (iii) a failure by the Company, without the Executive's consent, to
continue any Company Benefit Plans in which the Executive presently is entitled
to participate, as the same may be modified from time to time; (iv) a failure,
without the Executive's consent, by the Company to continue the Executive as a
participant in any Company Benefit Plans on at least the same basis as he
presently participates in such plans; (v) the requirement by the Company,
without Executive's consent, that the Executive be based anywhere other than
within 50 miles of the Executive's present office location, except for required
travel on the Company's business to an extent substantially consistent with the
Executive's present business travel obligations; (vi) a failure by the Company
to comply with any material provisions of this Agreement which has not been
cured within thirty (30) days after notice of such noncompliance has been given
by the Executive to the Company, or if such failure is not capable of being
cured in such time, a cure shall not have been diligently initiated by the
Company within such thirty-day period; or (vii) a failure by the Company to
obtain from any successor, before the succession takes place, an agreement to
assume and perform this Agreement; provided, however, that any of the foregoing
actions shall not be considered to be Good Reason if such action is undertaken
by the Company for Cause.
4.2 Termination by Company. The Executive's employment hereunder may be
terminated by the Company immediately for Cause. Subject to the other provisions
contained in this Agreement, the Company may terminate this Agreement for any
reason other than Cause upon thirty (30) days' written notice to Executive. The
effective date of termination ("Effective Date") shall be considered to be
thirty (30) days subsequent to written notice of termination; however, the
Company may elect to have Executive leave the Company immediately.
4.3 Severance Benefits Received Upon Termination.
(a) If (i) at any time the Executive's employment is terminated by
the Company for Cause, or (ii) at any time the Executive's employment is
terminated by the Executive without Good Reason, the Company shall pay the
Executive his base salary
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through the end of the month during which such termination occurs (or at the
Executive's election, the rate in effect on the first day of the month preceding
the month in which the date of termination occurs) plus credit for any accrued
vacation and the Company shall thereafter have no further obligations under this
Agreement to the Executive or his or her dependents, beneficiaries or estate;
provided, however, that the Company will continue to honor any obligations that
may have been accrued under then existing Company Benefit Plans or any other
agreements or arrangements applicable to the Executive.
(b) If (i) at any time the Executive's employment is terminated by
the Company without Cause, or (ii) at any time the Executive's employment is
terminated by the Executive for Good Reason, then the Company shall:
(1) pay to the Executive within four business days following
the date of termination his monthly base salary in effect on the date of the
termination through the end of the month during which such termination occurs,
plus payment for any vacation earned but not taken; and
(2) pay to the Executive as severance pay in a lump sum, in
cash, within seven business days following the date of termination, an amount
equal to (i) the Executive's monthly base salary in effect on the date of
termination, multiplied by (ii) thirty-five (35) months; provided, however, that
if the lump sum severance payment under this Section 4.3(b)(2), either alone or
together with other payments which the Executive has the right to receive from
the Company, would constitute a "excess parachute payment" (as defined in
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code")),
such lump sum severance payment shall be reduced to the largest amount as will
result in no portion of the lump sum severance payment under this Article III
being subject to the excise tax imposed by Section 4999 of the Code. The
determination of any reduction in the lump sum severance payment under this
Section 4.3(b)(2) pursuant to the foregoing proviso shall be made by the
Company's independent auditors in good faith and such determination shall be
conclusive and binding on the Executive and the Company;
(3) pay to the Executive a sum equal to (i) one-twelfth of the
Executive's annual compensation bonus for the entirety of the year in which the
termination occurs, multiplied by (ii) the number of months or portion thereof
the Executive was employed by the Company during the year in which the
termination occurs. The Company shall make such incentive compensation bonus
payment to the Executive concurrently with its payment of bonuses to other
executives of the Company; and
(4) maintain, at the Company's expense, in full force and
effect, for the Executive's continued benefit until the earlier of (i) two years
after the date of termination or (ii) the Executive's commencement of full time
employment with
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a new employer, all life insurance, medical, health and accident, and disability
plans, programs or arrangements in which the Executive was entitled to
participate immediately prior to the date of termination, provided that the
Executive's continued participation is possible under the general terms and
provisions of such plans and programs. In the event that the Executive's
participation in any such plan or program is barred, the Company shall arrange
to provide the Executive with benefits substantially similar to those which the
Executive was entitled to receive under such plans or programs. Subsequent
health insurance benefits will be in accordance with COBRA.
4.4 No Obligation to Mitigate Damages; No Effect on Other Contractual
Rights.
(a) The Executive shall not be required to mitigate damages or the
amount of any payment provided for under this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by the Executive as the
result of employment by another employer after the date of termination, or
otherwise (except as provided in Section 4.3(b)(3)).
(b) The provisions of this Agreement, and any payment or benefit
provided for hereunder, shall not reduce any amounts otherwise payable, or in
any way diminish the Executive's existing rights, or rights which would accrue
solely as a result of the passage of time, under any Company Benefit Plan,
employment agreement or other contract, plan or arrangement.
ARTICLE V
ASSUMPTION OF OBLIGATIONS BY SUCCESSOR TO COMPANY
5.1 Assumption of Obligations. The Company will require any successor
or assign (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, by agreement in form and substance satisfactory to the Executive,
expressly, absolutely and unconditionally to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession or assignment had taken place. Any
failure of the Company to obtain such agreement prior to the effectiveness of
any such succession or assignment shall be a material breach of this Agreement.
As used in this Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor or assign to its business and/or assets as aforesaid
which executes and delivers the agreement provided for in this Article V or
which otherwise becomes bound by all the terms and provisions of this Agreement
by operation of law. If at any time during the term of this Agreement the
Executive is employed by any corporation a majority of the voting securities of
which is then owned by the Company, "Company" as used in this Agreement shall in
addition include
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such employer. In such event, the Company agrees that it shall pay or shall
cause such employer to pay any amounts owed to the Executive pursuant to this
Agreement.
5.2 Beneficial Interests. This Agreement shall inure to the benefit of
and be enforceable by the Executive's personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amounts are still payable to him
or her hereunder, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Executive's devisee,
legatee, or other designee or, if there be no such designee, to the Executive's
estate.
ARTICLE VI
GENERAL PROVISIONS
6.1 Notice. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, as follows:
If to the Company: Procom Technology, Inc.
0000 Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxxxx Xxxx
If to the Executive: Xx. Xxxx Xxxx'joo
00 Xxxxxxxx
Xxxxxxx Xxxxx, XX 00000
or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
6.2 No Waivers. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time.
6.3 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
6.4 Severability or Partial Invalidity. The invalidity or
unenforceability of any provisions of this Agreement shall not affect the
validity or enforceability of any
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other provision of this Agreement, which shall remain in full force and effect.
6.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
6.6 Legal Fees and Expenses. Should any party institute any action or
proceeding to enforce this Agreement or any provision hereof, or for damages by
reason of any alleged breach of this Agreement or of any provision hereof, or
for a declaration of rights hereunder, the prevailing party in any such action
or proceeding shall be entitled to receive from the other party all costs and
expenses, including reasonable attorneys' fees, incurred by the prevailing party
in connection with such action or proceeding.
6.7 Entire Agreement. This Agreement constitutes the entire agreement
of the parties and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings, and negotiations between the parties with
respect to the subject matter hereof. This Agreement is intended by the parties
as the final expression of their agreement with respect to such terms as are
included in this Agreement and may not be contradicted by evidence of any prior
or contemporaneous agreement. The parties further intend that this Agreement
constitutes the complete and exclusive statement of its terms and that no
extrinsic evidence may be introduced in any judicial proceeding involving this
Agreement.
6.8 Assignment. Subject to the provisions of Article V hereof, this
Agreement and the rights, duties, and obligations hereunder may not assigned or
delegated by any party without the prior written consent of the other party.
Notwithstanding the foregoing provisions of this Section 6.8, the Company may
assign or delegate its rights, duties, and obligations hereunder to any person
or entity which succeeds to all or substantially all of the business of the
Company through merger, consolidation, reorganization, or other business
combination or by acquisition of all or substantially all of the assets of the
Company; provided that such person assumes the Company's obligations under this
Agreement in accordance with Section 5.1.
6.9 Arbitration. Any controversy, dispute, claim or other matter in
question arising out of or relating to this Agreement shall be settled, at the
request of either party, by binding arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association ("AAA"),
and judgement upon the award rendered by the arbitrators may be entered in any
court having jurisdiction thereof, subject to the following terms, conditions
and exceptions:
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(a) Notice of the demand for arbitration shall be filed in writing
with the other party and with the AAA. There shall be a panel of three (3)
arbitrators whose selection shall be made in accordance with the procedures then
existing for the selection of such arbitrators by the AAA.
(b) Reasonable discovery shall be allowed in arbitration.
(c) The costs and fees of the arbitration shall be allocated by the
arbitrators.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
PROCOM TECHNOLOGY, INC.,
a California corporation
By: XXXX XXXXX
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Its: Executive Vice President,
Finance and Administration
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EXECUTIVE
/s/ XXXX XXXXXXX
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Xxxx Xxxxxxx
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EXHIBIT A
ANNUAL INCENTIVE COMPENSATION BONUS
As set forth in Section 2.1 of the Agreement, the Executive shall
receive from the Company an annual incentive compensation bonus which shall be
part of the Executive's Annual Salary. The amount of the annual incentive
compensation bonus will be determined by the Board of Directors (after
consultation with, or based upon the recommendations of, the Compensation
Committee of the Board of Directors, if any such committee exists).
The amount of the Executive's annual incentive bonus shall be based
upon attainment by the Company of mutually agreed upon financial objectives.
Accordingly, if all of the mutually agreed-upon financial objectives are
attained, the Executive will receive an annual incentive compensation bonus
equal to a percentage of the Executive's base salary during the applicable
fiscal year. Should the Company not attain all of the relevant financial
objectives, the Board of Directors shall use its discretion (after consultation
with, or based upon the recommendations of, the Compensation Committee of the
Board of Directors, if any such committee exists) in determining the amount of
the Executive's annual incentive compensation bonus. The annual incentive
compensation bonus calculation shall be made promptly after preparation of the
Company's audited financial statements are completed following each of the
Company's fiscal years. The Company agrees to use its best efforts to complete
the audit of its financial statements so as to permit payment of this annual
incentive compensation bonus within ninety (90) days of the Company's fiscal
year end.
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